I think that those who call it a "cheat" are being cruel and shortsighted. And if they BELIEVE it, they're just ignorant.

CONS Can be hard on the neck if you're not careful
Can inhibit learning new keys (if REALLY used as a "cheat)

PROS Much easier to quickly match another performer or recording
Enables you to play in less familiar keys

More important, though, the sound is different as you play the same chord (let's say a C) in different positions using a capo.

In natural C formation, I get G-D-C-G-D-G In A formation (Capo 3), I get E-C-G-E-C-E

Still a C chord, but not the same sound. Most important - a different group of melody notes are available under my regular chord positions. Which way I do it will depend on the type of sound I want.

So, please, don't call it a "cheat". Watch any performance, look at your album covers - all the professionals use them, and you KNOW they know the chords.